Article | Journal of Policy Analysis and Management

Measuring the Effectiveness of Competition in Defense Procurement: A Survey of the Empirical Literature

by James J. Anton and Dennis A. Yao

Abstract

This article surveys the literature that has attempted to measure competition's effects on defense procurement. The focus is on conceptual underpinnings of models rather than technical aspects of estimation procedures. While providing valuable insight, the models are flawed because they assume an implicit model of the procurement environment that is inconsistent with reasonable economic evidence. The predictive power of empirical models is limited by a program-by-program estimation approach in which only a few data points are available to estimate multiple parameters. Improvements would result by using structural models that assume reasonable economic behavior and provide theoretical bases for cross-program analyses.

Keywords: Performance Effectiveness; Competition; Surveys; Value; Economics; Forecasting and Prediction; Programs; Power and Influence; Management Analysis, Tools, and Techniques;

Citation:

Anton, James J., and Dennis A. Yao. "Measuring the Effectiveness of Competition in Defense Procurement: A Survey of the Empirical Literature." Journal of Policy Analysis and Management 9, no. 1 (Winter 1990): 60–79. (Harvard users click here for full text.)